Given the paradigm shift in agricultural prices in recent months, what are the options available to Pakistan’s policy makers? They need to proceed simultaneously on two tracks. They need to use the significant changes in agricultures terms of trade to provide appropriate incentives to the farming community to produce more and they need to provide additional incomes to the poor, particularly those in the urban areas, to deal with the rise in food prices. For the poor, expenditure on food is by far the largest component of their budget.

Output can be increased in two different ways – by increasing the area under cultivation and by increasing the productivity of the land that is under the plough. As emphasszed by the government of Punjab’s Punjab Economic Report, 2007, Pakistan has reached the limit of expanding the area under cultivation. Land is still available but the country has run out of water.

In fact, agriculture has to compete with other demands for water – by an increasing population living in urban areas and by industry – while the supply is likely to diminish as a consequence of the change in climate. Pakistan is among the countries likely to be severely impacted by global warming. It has to opt for productivity increase and here there are enormous opportunities.

The last time Pakistan saw a significant increase in agricultural productivity was during the period of the “green revolution“– a term coined to describe what happened to the sector of agriculture in many developing countries, including Pakistan. But the enormous success of the green revolution in producing large output increases resulted in complacency. This manifested itself in several different ways, especially in terms of the neglect by public policy makers on agriculture. What suffered in particular was agricultural research.

Pakistan, in keeping with the unfortunate tradition of neglecting education and research, paid little attention to creating the infrastructure required to increase farm productivity. A number of agricultural scientists in Islamabad as well as Lahore, told me that the country had lagged behind not only East Asia but also India. “In crop research we are possibly 10 to 15 years behind India,” said a scientist working in the Islamabad based National Agricultural Research Council, (NARC).

Pakistani scientists speak of two problems in particular about agricultural research. Most agricultural research in developing countries is financed by governments but the Pakistani state did not invest a sufficient amount of resources in this activity. The second problem is the way research is structured. The federal government through the Pakistan Agricultural Research, (PARC), and its component, the NARC, has a significant presence in agricultural research. This is surprising since, under the constitution, agriculture is a provincial subject.

Also, Islamabad is physically distant from the heartland of agriculture with the consequence that the research findings from Islamabad do not get readily disseminated to the farming community. In the provinces, in particular in the Punjab, agricultural research lacks institutional focus. It is disbursed over a number of departments with insufficient coordination among them.

The previous Punjab government took a number of steps to remedy the situation. It created an institutional mechanism for co-ordinating research done by the various agencies and it opted for an institutional model that has succeeded in China. The previous administration in Lahore took the deliberate decision to focus research activities in a number of crop and product based institutions located in the areas where these crops and products are important. The management of the intuitions has been entrusted to autonomous boards of directors that have the representation not only of agricultural scientists and government departments but also of the private sector. This is a different institutional model from the one pursued earlier in which research was located in teaching institutions. India followed that practice – Ludhiana University in the state of Punjab has been at the forefront of that country’s impressive performance in agricultural research. The United States also follows the same model. “We looked at both models and opted for the Chinese practice of entrusting research resources to specialised institutions”, said the former secretary of Punjab’s agriculture department in a conversation.

It is likely that the amount of resources being committed to agricultural research will increase in the next few years. There is a growing recognition in the political and bureaucratic establishments that the state must spend additional money to promote this important activity. However, even with increased attention, results will be slow to materialise.

According to Bob Zeigler of the International Rice Research Institute (IRRI) the time lag between researching a new idea (dreaming up a new seed) and commercialising it is ten to 15 years. In the meantime, while domestic research efforts are being activated, Pakistan will have to borrow from the world outside as it did during the “green revolution” when high yielding seed varieties were imported from Mexico (in the case of wheat) and the Philippines (in the case of rice).

However, even when new seeds are obtained from abroad, they have to be properly tended to maintain their yield. When IRRI-8 rice variety was introduced in 1966, it produced almost ten tons per hectare. The yield has declined to seven tons. According to IRRI, between the 1960s and 1980s, yields of the main cereal crops increased by 3-6 per cent a year. Now annual growth is down to one to two per cent a year, way below the increase in demand. The world, including Pakistan, needs a new green revolution.

Growing crops on the field is one part – the beginning part – of a long chain that stretches from the farmer to the final consumer. There are a number of steps on the way especially when the focus moves to higher value added crops. The private sector has a larger role to play in developing these intermediate steps and in increasing their productivity through research. Supermarkets can be effective in this area. It is encouraging that some of the well-endowed European supermarkets such as Macro and Metro are establishing in Pakistan.

These stores need uniform quality, minimum large quantities, high standards of hygiene and, increasingly, produce that does not add to environmental problems. Once established, they reach out to the farming community to obtain the supplies they need. In the countries that have allowed international supermarkets to get established, half or more of food sales can be accounted by them.

The success of the Green Revolution in increasing productivity and output in the developing world also led to a decline in lending for agricultural development by international development institutions. According to the OECD, the World Bank and other donors cut the share of agricultural lending in development assistance to less than three per cent by 2005, down from 18 per cent in 1979. The sharp increase in food prices in 2007-08 have shocked the donor community back into action. On the eve of the recently concluded international conference on food security organised by the FAO and held between June 3-6, in Rome, the World Bank unveiled a $1.2 billion fast track facility to help combat the impact of rising food prices.

At the start of the meeting, senior UN officials urged nations to eliminate trade barriers, expand research into biotechnology and boost food production with an annual investment of $20-$30 billions “Nothing is more degrading than hunger especially when main-made,” Secretary General Ban k’i-moon told the conference. Hungary people are angry people, warned the Secretary General but his words did not have much effect on rich nations. The Rome Conference did not break new ground, essentially leaving individual countries to cope with a very difficult situation.